In accordance with its duties under the EU Merger Regulation, on 4 October 2019 the Commission has opened an in-depth investigation on the transaction between Boeing and Embraer for the creation of two joint ventures, notified on 30 August 2019. The first joint venture, solely controlled by Boeing, would take over Embraer’s global commercial aircraft business (product development, production, marketing, services). The second one instead,jointly controlled by the two companies, would be in charge of the marketing of the Embraer KC-390 military aircraft.
The two companies do not directly compete for most of their businesses. While Boeing, indeed, is one of the leading globally active manufacturers of large commercial aircraft, both single and twin-aisle,Embraer is mainly focused on regional jets. Nevertheless, the Commission is concerned that the transaction may reduce competition and result in higher prices. In particular, the fear is that it may deprive the commercial aircraft market of its third largest global competitor, Embraer, without manufacturers from China, Japan and Russia being able to fill this gap within the next five or even ten years.
None of the two companies has submitted commitments to address the Commission’s preliminary concerns, which now has 90 working days, until 20 February 2020, to determinewhether the transaction can effectively reduce competition.